Asian stocks and bonds are set for declines following a surge in oil prices that triggered a selloff in US markets. Brent crude climbed above $107 a barrel on Thursday, contributing to multi-year highs in Treasury yields and pushing the dollar to a one-week peak.
Bond markets faced additional pressure after the Treasury bought back $5.19 billion of debt, an amount lower than investors had anticipated. Concurrently, a hotter-than-expected producer-price report further bolstered traders' expectations for a Federal Reserve interest rate hike next week.
These developments reflect growing concerns about inflation and its potential impact on monetary policy, leading investors to price in a higher probability of the Fed tightening its policy in the near future.
